Totaal bedragen van 750 biljoen vond ik al heel wat, maar een Zwitsers fondsbeheerder verdubbelt het met gemak.
Een triljoen leek me echt te ver gaan, maar deze geldspecialist komt tot 1,5 triljoen aan geldwaarden, waarvan een dikke drie procent economische waarde heeft en de rest zijn openstaande schulden.
reyerz told King World News, “The world is simply drowning in debt.” Greyerz, who is founder and managing partner at Matterhorn Asset Management out of Switzerland, also said, “This is why it is guaranteed that governments will print money,” and that “Prices of hard assets will go into the stratosphere.”
But first, here is what Greyerz had to say about the ongoing financial crisis and where we are headed: “Spanish rates have broken back above the 7% level once again, but in reality we know that many European countries will never be able to repay these debts. You now have a total worldwide debt of around $150 trillion. If you add to that contingent liabilities, unfunded liabilities, pension funds, etc., you are talking about $500 trillion.
“If you add to that the outstanding derivatives, which are around one quadrillion dollars, and there are no reserves for them. These are issued without any real asset backing them. If you combine the two figures you are at a staggering one and a half quadrillion dollars. That’s against world GDP which is around $50 trillion.
So you are talking here about a leverage of 30 times global GDP….
How can anyone in the world invest in any government bond when they know that it can never be repaid? The world is simply drowning in debt. This is why it is guaranteed that governments will print money.
So the money printing will come and the hyperinflation will come because without that we have no banking system and no financial system left. You are talking about hundreds of trillions of dollars that potentially need to be printed. The effect of this on the global economy will be disastrous.
Prices of hard assets will go into the stratosphere, and this, of course, includes gold and silver. Last time we talked about my target on gold of $3,500 to $5,000 over the next 12 to 18 months, and then over $10,000 in 3 years. But with all of the money creation we are talking about, the world will experience massive inflation. We already know that gold went from 100 marks to 100 trillion marks, from 1919 to 1923, during the Weimar Republic.
With world debt at much greater levels today vs that time period, the gold price will eventually have lots and lots of zeros after it. But people who are still holding paper money may very well find it is worthless. At least gold will protect your purchasing power.
What has to be said today to holders of government debt, which yields nothing, is when you have governments like the US, Spanish, Greek, and now even the German government with all of their ballooning commitments, there is no government that will ever be able to repay these debts.
This is why it’s so important for KWN readers to understand the consequences and be able to protect themselves. Readers and listeners must understand the risks in the system here and take precautions. We may be in the summer doldrums, but the next move will come. It’s not far away at this point.”